It has long been recognized that aquatic organisms are capable of indicating water quality.We organized and synthesized a wide variety of biological assessment approaches into an ecological assessment framework for watershed management. The goals of ecological assessment are to evaluate the health of a stream and its watershed and to identify stressors for solving environmental problems. There are four components in this ecological assessment framework: response assessment evaluates the health of streams; exposure and stressor assessment evaluates the human disturbance regime in the watershed and human activity-stressor relationship; stressor-response assessment evaluates effects of stressors on the health of streams; and ecological characterization is an integration of response, exposure, and stressor-response assessments. Watershed management is then planned according to integration of the ecological assessment, multiple uses of water, social-economical factors, and political issues. This ecological assessment framework provides an integrative tool to evaluate streams and their watersheds ecologically and to promote a balance between ecological integrity and economic development.